Motherhood and Labour Market Outcomes: Penalty or Premium?

Using nationally representative longitudinal data from the Consumer Pyramids Household Survey, we examine the effect of childbirth on female labour market outcomes in India. Contrary to findings from similar studies in developed countries, we do not observe any motherhood penalty in earnings, employment or work hours post-childbirth, after accounting for unobserved individual heterogeneity. Interestingly, we find that the birth of a child leads to a 27.4% and 32.6% increase in women’s average earnings in urban and rural regions, respectively, relative to non-mothers. This motherhood premium seems to arise partly due to higher employment after childbirth. Further, we find that the increase in the likelihood of employment is predominantly observed among women from lower caste, Hindu religion, lower income quartiles, those with primary education, and higher order births in urban regions. In rural regions, the effect is restricted to women from the lowest income quartiles. We find that the presence of older siblings in the household increases the likelihood of women’s employment by 3.7 percentage points. These findings underscore the role of socio-economic factors in shaping the labour market outcomes of women in India.